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00:00 Hello and welcome to NDTV Prophet. I am your host Varsha Chandanani.

00:04 Max Healthcare reported its Q4 FY24 results and to speak about the results, how was the number,

00:10 how was the quarter and how was the FY24 as a whole, I am here joined by Mr. Abhay Sohi,

00:16 who is the Chairman and Managing Director of the company. Hello and welcome to the show.

00:20 Thank you so much for having me. So, Mr. Abhay, if you see Q4 being one of the strongest

00:29 quarter for us, revenue was up 17%, we had a margin of 27% versus 28% last year, but net

00:38 profit was up only 0.2%. Now, Q4 being the strongest quarter, what stood out for us,

00:45 number one, and were there any disappointments? So, as expected, I think our revenue and our

00:54 EBITDA has been the highest ever. In fact, we've crossed a new milestone, which is 500 crores of

01:02 EBITDA for this quarter for the first time. What has happened is our translation of EBITDA to net

01:10 profit has sort of reduced because our EBITDA to free cash flow translation, which used to be 78%,

01:16 has come down to 70%. This is due to higher incidence of tax. We're paying a higher amount

01:22 of tax and therefore, you essentially see the net profit being fairly flat compared to what

01:29 EBITDA has been, which has been a scene of growth. And how was the RPOP for us in this quarter versus

01:37 March 24, March 23 last year? There's been more than a 10% increase in RPOP. And there's been

01:46 year on year, there's been a 15% increase on revenue and there's been a 15% increase on

01:52 EBITDA as well. But like you rightly pointed out, the net profit has been even.

01:56 Now, if you see, Mr. Abhay, we have reported 15% growth in RPOP over the last three years.

02:04 Now, I am assuming this is because of change in mix, then of course, international business and

02:13 your venture into oncology segment as well, the increase in oncology segment as well. Now,

02:19 where do you see this RPOP going? I mean, can we maintain this 10 to 15% growth in RPOP every year?

02:27 Absolutely. I think there's always an interplay between RPOP and occupancy. Whilst you see a

02:36 larger growth in RPOP, in our case, you see a lesser growth in occupancy. And that is,

02:42 in some manner, one sort of answers for the other. When you don't have idle capacity and

02:47 you have capacity constraints, automatically, you will have a higher increase in RPOP.

02:52 But going forward, as new capacities come on stream, you will see higher growth in occupancy,

02:57 but perhaps a little more tempered growth in RPOP. But having said that, the overall EBITDA

03:03 per bed and overall EBITDA levels and even the revenue levels will be significantly higher.

03:11 So, say for next 2 to 3 years, what top line are you expecting in next 2 to 3 years and also

03:20 the margins like 27, 28% margin, can we see more uptick in margin from here or 27,

03:27 28% is a normal margin that is sustainable? So, I'm not going to guide you to exactly what our

03:34 top line growth is going to be because we've never sort of done that in the past either.

03:40 We don't give forward-looking guidances. But what I can tell you is our focus is always on EBITDA per

03:46 bed rather than EBITDA margins. EBITDA margins can come down. I mean, if you actually look at this

03:53 quarter, quarter 4 versus quarter 4 last year, you will see that EBITDA margins per se have come

04:00 down perhaps by 50 basis points. But EBITDA per bed has increased by about 14-15%. Eventually,

04:10 what we have is number of days in a year and a bed inventory. So, EBITDA per bed is a tour sort of

04:17 guidance. We'd rather do a $10,000 or let's say 10 lakh rupees surgery and have a 20% margin in it

04:24 than do a 2 lakh rupees surgery and have a 50% margin in it. So, I think EBITDA per patient per

04:31 bed is a better number and that is what we sort of focus on. Okay. And also, oncology is actually

04:38 a big focus for you and you've been investing in this segment as well. Now, my question is that the

04:46 key growth opportunity in oncology that you're seeing and what kind of expectation you have

04:52 from this segment in terms of addition to your hospital revenue. So, technically for next maybe

04:57 two to three years, where are you seeing this segment going forward? I think the growth in

05:01 oncology is significantly higher than growth in other specialities. And as you see awareness of

05:10 this more testing, more and more patients wanting to treat it at the earliest etc. These numbers are

05:18 only, we expect these numbers to grow unfortunately. But yes, I think as awareness and incidence of

05:24 cancer increases in our country and all over the world, we see both domestic and medical tourism

05:31 sort of contributing to higher growth in oncology compared to even other specialities.

05:35 And also on the international patients, if you see, I would like to understand the growth maybe

05:42 for this quarter and for the full year FY24, if you could break down for us into volume and

05:48 realization growth. So, it's about 9% of our revenues effectively come from international

05:56 tourism, which essentially means 6% of our total bed strength is contributing to it. This of course

06:03 being higher our core business than usual generates more revenue. So, 6% beds generate 9%

06:10 revenues. And this has been growing at a 20 plus percent through the year. This quarter again to

06:16 the 14% plus growth that we had for the particular quarter. This is on account of certain markets,

06:23 there's a number of business because of Eid and some of the other things etc. But we expect good

06:31 traction and good growth similar to what has been in the past few years in this business, in this line.

Max Healthcare's Intl Patient Revenue Gains | NDTV Profit

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